Former Sea Island Company president wants his $27 million

He asks court to stop company from spending until he gets paid.

St. Simons Island, Ga...Former Glynn County Commissioner Uli Keller, right, and Dennie McCrary, a retired Sea Island Co., are show at the new Family Zone at the St. Simons Island Casino in March 2009.

BRUNSWICK - The former president of the Sea Island Company asked a bankruptcy court judge Thursday to prevent the financially crippled company from spending all its money before he gets paid the millions that it owes him.

Dennie McCrary, also a Sea Island resident, is owed about $27 million. He is among more than 16,000 creditors known so far with claims against the luxury resort and real estate development company that is about $600 million in debt.

McCrary's lawyer, Rufus T. Dorsey IV, asked U.S. Bankruptcy Court Judge John Dalis to order the company not to spend about $5.9 million in one of the company's bank accounts before a committee of creditors is established to oversee claims from individuals and businesses owed money.

"Our concern is that it is not consumed before the committee is put in order ... If the debtor [company] is allowed to use these unencumbered funds, they will all be consumed," Dorsey said.

The money is the proceeds from several large tracts of land sold by Sea Island before it filed for bankruptcy Tuesday, company lawyer Sarah Borders told Dalis.

Dalis said he doubted the court could stop the company if it needs that money for daily operations or its reorganization.

"I don't know how we could stop them or if the court should," Dalis said.

Borders then said the company will agree not to use that cash before the committee is set.

The money was among a series of financial issues discussed and procedures hashed out during a 2? hour hearing.

Sea Island has agreed to sell its golf courses, hotels, spa, beach club and other resort properties for a minimum of $197.5 million in cash, which is about 30 cents on the dollar.

The potential new owner is a joint venture of funds managed by Oaktree Capital Management LP of Los Angeles and Avenue Capital Group of New York, which specialize in distressed properties.

The new owners will get Sea Island's properties, but will not take over the company's liabilities, which include about $500 million owed to the Synovus Financial Group, Bank of America and Bank of Scotland.

McCrary and several other former employees who are now creditors attended the hearing, which was staffed by about 20 lawyers representing debtors and creditors.

Bill Jones III, the third-generation head of the family-owned company, will continue as chairman and chief executive officer and David Bansmer will remain as president and chief operating officer. Jones, however, loses his controlling interest in the company.

Neither Jones nor Bansmer spoke during the hearing. Jones sat with his hands clasped as the judge and lawyers worked out the schedule for auctioning off his company.

Sea Island is the third largest employer in the region. Its 1,400 employees will keep their jobs, certain health benefits and their vacation time, according to the bankruptcy plan.

"There are a lot of creditors in this case when you look at the vendors and employees. You're also looking at a group of former executives whose claims need looking at," Borders said.

Dalis authorized the company to pay its employees any wages, health insurance benefits, vacation, sick days or personal time and to reimburse employees for any expenses incurred before it filed for bankruptcy. Those payments, however, cannot exceed $11,725 person, he ruled.

He also authorized the company to continue its pre-existing employee insurance programs. The company also may pay any pre-existing bills from its vendors and contractors. In addition, it may pay its taxes, Dalis said.

Dalis forbade Georgia Power and other utilities from shutting off service to the company because of any outstanding debts.

The company's lawyers urged Dalis to expedite the proceedings as much as possible.

"The debtor [Sea Island] needs to complete the process quickly to avoid the loss of the sale," Borders said.

Although sympathetic, Dalis replied that the law mandates the amount of time necessary to notify creditors and allow them time to file claims.

Dalis set a final hearing for Sept. 9. He agreed the auction would be held in October followed by the closing in November.

meeting of the minds of the buyer and seller dictates that bond. And they (realtors) are not middle men, they either represent the buyer or the seller, unless agreed to by the parties involved. Take a real estate or business course.